As Cloud Computing matures, will it evolve into a viable platform used by financial services organizations, including Risk Management? If so, are Business Intelligence (BI) tools the best mechanism to access, navigate, manipulate, and report on the Cloud-based data and content? If we oversimplify and look at Cloud Computing as simply picking up our data centers and placing them in the Cloud, then our existing BI tools would likely follow. However, if we look at financial services, and specifically Risk Management, the questions become:
- Who is in charge of minimizing risk when BI happens in the Cloud?
- Should any of the risk extend to the Cloud provider?
Let’s look at a few of the opportunities and pitfalls of Risk Management performed using BI tools in the Cloud.
Opportunities
- Security – Assuming there is a level of security to the Cloud and a level of security to the BI tools themselves, levels of security surrounding risk management data in the Cloud would be increased.
- Interoperability – Applications are increasingly “certified” to work together in the Cloud. Seamless interoperability in the Cloud increases usability. This interoperability would likely reduce risk at some level.
- Usability – Simpler usability combined with ubiquitous Cloud-based access opens up data to the masses of a Risk Management organization. More smart people evaluating risk is, over time, a benefit.
Pitfalls
- Security – Do Risk Managers feel safe with data in the Cloud? Have the factors that equal safety to the Risk Manager been defined yet, or is it too early?
- Risk Methodology – Does standard risk methodologies practice and order continue in the Cloud? Do BI vendors have this in their scope as they move to the Cloud? Where does responsibility for risk methodologies lie?
- Standards Adherence – Does compliance with standards bodies still apply in the Cloud for Risk Management? Do standards like Project Management Institute, The National Institute of Science and Technology, or ISO Standards still apply?
Cloud computing is the next generation model for how software gets delivered to its consumers. If we extend this notion to financial services risk management, BI becomes the tool to manage risk in the Cloud. One of the combined opportunities and pitfalls of using BI tools to manage risk in the Cloud is the blurring of lines between content and applications. As the applications become easier to use, they become more available to the general business user. This general availability of BI tools and data increases risk. As we all run to the Cloud, is the risk too great or is it an opportunity? And, who is ultimately in charge?
Bill Peterson
Spotfire Blogging Team
